Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Stock Loan and Repurchase Processing, 1239-1240 [E7-25655]
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Federal Register / Vol. 73, No. 4 / Monday, January 7, 2008 / Notices
PBOT under the Vendor/Subvendor
Agreement. This credit is also currently
given to vendors paying the Enterprise
License Fee.
Phlx proposes to eliminate the ability
to access the market data on a
‘‘snapshot’’ basis and consequently
proposes to eliminate the snapshot data
fee, effective January 1, 2008. The
Exchange states that only a few vendors
currently elect to use snapshot data.
Consequently, PBOT seeks to eliminate
the associated operational and
accounting expenses of administering
the snapshot data fee. Phlx is also
proposing to eliminate the applicability
of the 15% Administrative Fee credit to
market data vendors paying the
Enterprise License Fee.
pwalker on PROD1PC71 with NOTICES
III. Discussion
After careful consideration, the
Commission finds that the amended
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange.12 In particular, the
Commission finds that the proposed
rule change is consistent with section
6(b)(5) of the Act,13 which requires,
among other things, that the rules of a
national securities exchange be
designed to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. The Commission also
finds that the proposal is consistent
with section 6(b)(4) of the Act,14 which
requires the equitable allocation of
reasonable dues, fees, and other charges
among the Exchange’s members and
issuers and other persons using its
facilities. The Commission also
continues to believe that PBOT’s MDDN
fee structure is consistent with Rule 603
under the Act 15 regarding the
distribution, consolidation, and display
of information with respect to
quotations for and transactions in NMS
stocks.
The Commission believes that the
Exchange’s proposal to eliminate
snapshot requests for index value data
and the associated fee is consistent with
the Act. The Exchange makes available
the same market data through other
means, and, in the absence of a
compelling regulatory concern, it is a
12 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
13 15 U.S.C. 78f(b)(5).
14 15 U.S.C. 78f(b)(4).
15 17 CFR 242.603.
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19:05 Jan 04, 2008
Jkt 214001
reasonable exercise of the Exchange’s
business judgment to choose the means
of delivery of this data.
With respect to Phlx’s proposal to
eliminate the applicability of the
Administrative Fee credit to vendors
electing to pay the Enterprise License
Fee, the Commission believes that the
rule change is reasonable. The Exchange
represents that, unlike vendors electing
to receive market data pursuant to the
device fee, vendors electing to receive
market data pursuant to the Enterprise
License Fee are not required to bear the
same ongoing administrative expenses.
In particular, vendors paying the device
fee must prepare and deliver to PBOT a
detailed monthly accounting and report
of Devices. By contrast, a vendor paying
the Enterprise License Fee is required
only to submit an initial certification,
and must notify PBOT of any changes to
its qualification, but has no requirement
to submit any on-going accounting to
PBOT.16 Thus, the administrative costs
to a firm associated with monitoring its
ongoing eligibility for the Enterprise
License Fee should be substantially less
than the administrative costs to a
vendor subject to the device fee.
IV. Conclusion
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,17 that the
proposed rule change (SR–Phlx–2007–
75), as amended, be, and it hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Nancy M. Morris,
Secretary.
[FR Doc. E8–9 Filed 1–4–08; 8:45 am]
BILLING CODE 8011–01–P
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Fmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57071; File No. SR–DTC–
2007–15]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Relating to
Stock Loan and Repurchase
Processing
December 31, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
November 7, 2007, The Depository Trust
Company (‘‘DTC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared primarily by DTC. DTC filed
the proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 2 and
Rule 19b–4(f)(4) 3 thereunder so that the
proposal was effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Under the proposed rule change, DTC
will provide participants using DTC’s
Stock Loan REPO Adjustment Menu
(‘‘SLRM’’) system with new warning
messages advising participants if any
corrective action is needed to complete
their stock loan or repurchase
transaction.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
16 The Exchange notes that several large vendors
are currently paying the Enterprise License Fee. To
be eligible for the Enterprise License Fee, a vendor
must certify to PBOT that it qualifies for the
Enterprise License Fee, including that market
distribution is predominantly to non-professional
users, and must immediately notify PBOT if it can
no longer certify its qualification.
17 15 U.S.C. 78s(b)(2).
18 17 CFR 200.30–3(a)(12).
PO 00000
1239
Sfmt 4703
In its filing with the Commission,
DTC included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. DTC has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78s(b)(3)(A)(iii).
3 17 CFR 240.19b–4(f)(4).
2 15
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07JAN1
1240
Federal Register / Vol. 73, No. 4 / Monday, January 7, 2008 / Notices
pwalker on PROD1PC71 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Prior to this rule change, DTC’s SLRM
system did not validate the reason code
used to reclaim a stock loan or
repurchase (‘‘repo’’) transaction. DTC
participants have stated that the
majority of errors associated with this
process arose when the wrong reason
code was used by counterparties.
To reduce the frequency of these
errors and the associated burden of
correcting them, DTC is modifying its
system by providing warning messages
that advise a participant that a
transaction will be rejected due to an
incorrect reason code for reclaiming
these items. As a result, users will be
prompted to correct the reason code. In
addition, if a participant that is to return
the stock of a loan or repo transaction
does not have sufficient inventory in its
DTC deliverer/CUSIP/contra account to
cover the return, it will receive a
notification advising that an insufficient
position exists so that it can take
corrective action. Finally, if there is an
open repo position for the same major/
contra/CUSIP in DTC’s system, a new
warning message will be displayed
stating that an open repo position for
the contra/CUSIP exists.
A new help screen will be displayed
in SLRM to guide users when they
submit a stock loan or repo transaction.
The screen will describe the impact that
a given action will have on the
originator’s stock loan or repo account
and the related dividend payment. Also,
the SLRM summary screen will be
modified to list outstanding adjustments
for a period of twenty business days
instead of the current five business
days. This will give participants more
time to react to open stock loan or repo
items so that they may be reconciled in
a more timely fashion.
Proposed system changes will
necessitate revisions to existing DTC
Service Guides.4
DTC states that the proposed rule
change is consistent with Section 17A of
the Act 5 and the rules and regulations
thereunder applicable to DTC as it
allows for more efficient processing of
certain transactions and will not
adversely affect the safeguarding of
funds or securities in DTC’s custody and
control or for which it is responsible.
4 The affected section of DTC’s Guide is attached
as Exhibit 5 to DTC’s rule filing.
5 15 U.S.C. 78q–1.
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19:05 Jan 04, 2008
Jkt 214001
B. Self-Regulatory Organization’s
Statement on Burden on Competition
DTC does not believe that the
proposed rule change will have any
impact or impose any burden on
competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
DTC has not solicited or received
written comments relating to the
proposed rule change. DTC will notify
the Commission of any written
comments it receives.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(iii) 6 of the Act and Rule
19b–4(f)(4) 7 thereunder because it
effects a change in an existing service of
a registered clearing agency that does
not adversely affect the safeguarding of
securities or funds in the custody or
control of the clearing agency and does
not significantly affect the respective
rights or obligations of the clearing
agency or persons using the service. At
any time within 60 days of the filing of
the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
All submissions should refer to File No.
SR–DTC–2007–15. This file number
should be included on the subject line
if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 450 Fifth Street, NW.,
Washington DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at DTC’s principal office and on
DTC’s Web site at https://www.dtc.org/
impNtc/mor/. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submission
should refer to File No. SR–DTC–2007–
15 and should be submitted on or before
January 28, 2008.
For the Commission by the Division of
Trading and Markets pursuant to delegated
authority.8
Nancy M. Morris,
Secretary.
[FR Doc. E7–25655 Filed 1–4–08; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–DTC–2007–15 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
6 15
7 17
PO 00000
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(4).
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Sfmt 4703
8 17
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CFR 200.30–3(a)(12).
07JAN1
]]>Agencies
[Federal Register Volume 73, Number 4 (Monday, January 7, 2008)]
[Notices]
[Pages 1239-1240]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-25655]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57071; File No. SR-DTC-2007-15]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to Stock Loan and Repurchase Processing
December 31, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on November 7, 2007, The
Depository Trust Company (``DTC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
primarily by DTC. DTC filed the proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act \2\ and Rule 19b-4(f)(4) \3\
thereunder so that the proposal was effective upon filing with the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78s(b)(3)(A)(iii).
\3\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Under the proposed rule change, DTC will provide participants using
DTC's Stock Loan REPO Adjustment Menu (``SLRM'') system with new
warning messages advising participants if any corrective action is
needed to complete their stock loan or repurchase transaction.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, DTC included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. DTC has prepared summaries, set forth in sections A, B,
and C below, of the most significant aspects of such statements.
[[Page 1240]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
Prior to this rule change, DTC's SLRM system did not validate the
reason code used to reclaim a stock loan or repurchase (``repo'')
transaction. DTC participants have stated that the majority of errors
associated with this process arose when the wrong reason code was used
by counterparties.
To reduce the frequency of these errors and the associated burden
of correcting them, DTC is modifying its system by providing warning
messages that advise a participant that a transaction will be rejected
due to an incorrect reason code for reclaiming these items. As a
result, users will be prompted to correct the reason code. In addition,
if a participant that is to return the stock of a loan or repo
transaction does not have sufficient inventory in its DTC deliverer/
CUSIP/contra account to cover the return, it will receive a
notification advising that an insufficient position exists so that it
can take corrective action. Finally, if there is an open repo position
for the same major/contra/CUSIP in DTC's system, a new warning message
will be displayed stating that an open repo position for the contra/
CUSIP exists.
A new help screen will be displayed in SLRM to guide users when
they submit a stock loan or repo transaction. The screen will describe
the impact that a given action will have on the originator's stock loan
or repo account and the related dividend payment. Also, the SLRM
summary screen will be modified to list outstanding adjustments for a
period of twenty business days instead of the current five business
days. This will give participants more time to react to open stock loan
or repo items so that they may be reconciled in a more timely fashion.
Proposed system changes will necessitate revisions to existing DTC
Service Guides.\4\
---------------------------------------------------------------------------
\4\ The affected section of DTC's Guide is attached as Exhibit 5
to DTC's rule filing.
---------------------------------------------------------------------------
DTC states that the proposed rule change is consistent with Section
17A of the Act \5\ and the rules and regulations thereunder applicable
to DTC as it allows for more efficient processing of certain
transactions and will not adversely affect the safeguarding of funds or
securities in DTC's custody and control or for which it is responsible.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
DTC does not believe that the proposed rule change will have any
impact or impose any burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
DTC has not solicited or received written comments relating to the
proposed rule change. DTC will notify the Commission of any written
comments it receives.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(iii) \6\ of the Act and Rule 19b-4(f)(4) \7\ thereunder
because it effects a change in an existing service of a registered
clearing agency that does not adversely affect the safeguarding of
securities or funds in the custody or control of the clearing agency
and does not significantly affect the respective rights or obligations
of the clearing agency or persons using the service. At any time within
60 days of the filing of the proposed rule change, the Commission may
summarily abrogate such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(3)(A)(iii).
\7\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File No. SR-DTC-2007-15 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File No. SR-DTC-2007-15. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 450 Fifth Street,
NW., Washington DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at DTC's principal office and on DTC's Web site
at https://www.dtc.org/impNtc/mor/. All comments received will
be posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submission
should refer to File No. SR-DTC-2007-15 and should be submitted on or
before January 28, 2008.
For the Commission by the Division of Trading and Markets
pursuant to delegated authority.\8\
Nancy M. Morris,
Secretary.
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
[FR Doc. E7-25655 Filed 1-4-08; 8:45 am]
BILLING CODE 8011-01-P
